Journal article


Asymmetric Tax Competition with Formula Apportionment


Publication Details
Author(s): Wrede M
Publisher: Springer Verlag
Publication year: 2014
Volume: 7
Pages range: 47-60
ISSN: 1864-4031
Language: English

Abstract

This paper analyzes asymmetric tax competition under formula apportionment. It sets up a model with multinationals where two welfare-maximizing jurisdictions of different size levy source-based corporate taxes and allocate taxes using the formula approach. At the Nash equilibrium, tax rates are too low and public goods quantities are too small. The paper shows that the (marginally) larger country levies a larger tax rate compared to the smaller country. Citizens of the larger country are worse off than those of the smaller country. The larger country employs inefficiently little capital. © 2013 Springer-Verlag Berlin Heidelberg.



Focus Area of Individual Faculties


How to cite
APA: Wrede, M. (2014). Asymmetric Tax Competition with Formula Apportionment. Letters in Spatial and Resource Sciences, 7, 47-60. https://dx.doi.org/10.1007/s12076-013-0100-0

MLA: Wrede, Matthias. "Asymmetric Tax Competition with Formula Apportionment." Letters in Spatial and Resource Sciences 7 (2014): 47-60.

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